Monthly Archives: October 2011

Call to boost support for ‘forgotten army’ of medium-sized firms

The Confederation of British Industry (CBI) has called on the Government to provide more support to the UK’s ‘forgotten army’ of medium-sized businesses.

In a new report, the business group urges ministers to improve firms’ access to finance, adding that many medium-sized enterprises are ‘under the radar’ of policymakers.

The CBI said firms with a turnover between £10m and £100m represented less than 1% of UK businesses but generated 22% of revenues and 16% of all jobs.

“Medium-sized businesses are truly a forgotten army, and now is the time to unlock their potential,” commented CBI director general, John Cridland.

“We should be championing, nurturing and encouraging our mid-sized firms so that more of them grow and create jobs. For too long these companies, which could inject tens of billions of pounds into our economy, have fallen under the radar of policymakers”.

The report also suggests that the UK should replicate the German model of the ‘Mittelstand’, where specific support is given to medium-sized businesses.

“I want the UK to have its own version of the German ‘Mittelstand’ – a backbone of medium-sized firms which export, innovate and generate growth,” said Cridland. “These future champions would help the UK weather unexpected economic shocks, and act as a new engine for growth.”

He continued, “To achieve extra growth, medium-sized firms must have access to new kinds of finance. This means opening UK bond markets to medium-sized businesses, encouraging use of venture capital, and making it easier for large companies to invest in medium ones, possibly in their supply chains.”

Responding to the report, a Department for Business spokesperson said, “We welcome the CBI’s focus on the UK’s mid-sized companies […] The Government is already focused on this group as part of the growth review, and we will be setting out our proposals alongside the autumn statement in November.”

Paper Tax Return deadline looming

Taxpayers only have a few days to file their Tax Return on paper without incurring a penalty.

Individuals have until 31 October 2011 to submit a paper Self Assessment Tax Return, although a later deadline of 31 January 2012 applies to those wishing to complete the process online.

Tax Returns filed after the deadline will attract a £100 fine, even if there is no tax to pay or it is eventually paid on time.

As previously announced, new Self Assessment penalties for late Returns and late payments come into effect this autumn and apply to Returns for 2010/11, and all future financial years.

The new penalties for late Self Assessment Returns are:

  • an initial £100 fixed penalty, which will now apply even if there is no tax to pay, or if the tax due is paid on time;
  • after 3 months, additional daily penalties of £10 per day, up to a maximum of £900;
  • after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater; and
  • after 12 months, another 5% or £300 charge, whichever is greater. In serious cases, the penalty after 12 months can be up to 100% of the tax due.

New penalties for paying late are 5% of the tax unpaid at 30 days, at 6 months, and at 12 months. Interest will also be charged on top of these penalties.

Leaked report calls for unfair dismissal rules to be scrapped

The unfair dismissal rules should be scrapped to make it easier for employers to sack unproductive workers, a leaked Government report suggests.

A document obtained by The Daily Telegraph argues that the current unfair dismissal rules make it difficult for bosses to fire underperforming members of staff, enabling some to simply ‘coast along’.

Currently workers who feel they were unfairly dismissed can make a claim after 12 months in a job.

However the leaked report, which was written by venture capitalist Adrian Beecroft, calls for the unfair dismissal rules to be abolished completely.

The document, dated 12 October, says the first major issue for British enterprise is ‘the terrible impact of the current unfair dismissal rules on the efficiency and hence competitiveness of our businesses, and on the effectiveness and cost of our public services’.

It continues: ‘The rules both make it difficult to prove that someone deserves to be dismissed, and demand a process for doing so which is so lengthy and complex that it is hard to implement. This makes it too easy for employees to claim they have been unfairly treated and to gain significant compensation.’

Earlier this month the Government announced changes to the rules on unfair dismissal, which it claims could save British businesses nearly £6 million a year.

Under the changes, which come into force on 1 April 2012, employees will only qualify for the right to claim unfair dismissal after two years of employment, rather than one.

In addition, a fee system will be introduced for those employees who wish to raise a tribunal claim, with a view to reducing the number of ‘vexatious’ claims. With effect from April 2013, employees must pay a £250 application fee, with a further charge of £1,000 if a hearing is granted. If successful, the money will be refunded to the claimant.

Second rise in state pension age delayed by six months

The Government has delayed its plans to increase the state pension age to 66, following concerns that many thousands of women will have to wait longer to collect their pensions.

Under the plans, the pension age for women was set to rise from 60 to 65 by 2018, followed by a second increase in the pension age to 66, in April 2020.

However, critics of the scheme warned that many thousands of women who were born in the 1950s would have to work for an extra two years before qualifying for their pensions, with little time to plan for the change.

The second rise in the pension age will now take place in October 2020, benefitting around 245,000 women.

Work and Pensions Secretary, Iain Duncan Smith, said that the move should alleviate women’s concerns.

However, the TUC warned that increasing the state pension age will not create any extra jobs for older workers, and that many women will have to rely on the benefits system to bridge the gap.

We can help with your tax and financial planning needs – please contact us for advice and assistance.

‘Millions of taxpayers’ set for rebate

As many as six million taxpayers will be entitled to a tax rebate in the coming months, with an average value of £400, HM Revenue & Customs (HMRC) has confirmed.

Meanwhile, a further one million people will be told that they owe tax to HMRC, with each underpayment averaging around £500-£600.

The revelation follows the identification of further discrepancies in tax and national insurance, which were highlighted by HMRC’s new computer system.

In 2010, over four million taxpayers were identified as being eligible for a refund, with payments averaging more than £1,400, while over one million people were told that they had underpaid their tax.

HMRC has confirmed that letters will be sent out to affected taxpayers in the coming months.

The overpayments, which relate to the 2007/08 tax year or earlier, and include interest, will be settled by December 2012.

Taxpayers who owe money to HMRC will be able to spread their payments by means of an adjustment to their tax code.

We can advise on all aspects of tax and financial planning. Please contact us for further help and advice.

Business calls for manufacturing boost ahead of Autumn Statement

The UK’s leading manufacturers’ organisation, the EEF, has called on the Government to introduce urgent measures to help boost business growth, including tax cuts and industry incentives, in next month’s Autumn Statement.

The EEF is urging Chancellor George Osborne to cut taxes, reduce employment regulation, improve competition in the banking sector, and reduce the cost of fighting climate change.

In the short term, the organisation is seeking the introduction of 100% first year capital allowances for a limited period of two years, a reform of R&D tax credits, an extension of the Business Growth Fund, a rethink of the proposals on Equal Pay Audits and employment tribunal fines, and a clarification on the legal status on apprenticeships.

Terry Scuoler, EEF Chief Executive, said, ‘Timely and targeted measures are required now to boost investment and growth. Last year, the biggest threat to growth came from our fiscal deficit. Today the biggest threat to reducing that deficit comes from weak growth. Failure to act now will only make the future challenges even bigger and risks undermining our hard-won fiscal credibility’.

The call comes alongside a new warning that the UK economy has reached a ‘dangerous junction’. According to the latest Item Club report, uncertainty across the Eurozone and a stalling global economy are undermining business confidence.

Despite the Bank of England’s latest quantitative easing measures, the body has downgraded its forecast for GDP from 1.4% to 0.9% for this year, and from 2.2% to 1.5% for 2012.

 

PM+M shortlisted for two NWSCA awards

PM+M has been shortlisted for two NWSCA (North West Society of Chartered Accountants) Accountancy and Business awards.

PM+M has been shortlisted for the prestigious NWSCA ‘Firm of the Year’ award, whilst Blackburn office-based Business Services Senior, Danielle Vollentine, has been named as a finalist in the NWSCA ‘Accountancy Rising Star (in Practice)’ category.

Winners will be announced at the annual NWSCA Awards Dinner on 24 November at Ribby Hall, Preston. We are all looking forward to the results!

PM+M Managing Partner, Stephen Anderson: “I’d like to take this opportunity to thank and congratulate the entire PM+M team, it is your dedication and hard work that has got us through to the finals. And many congratulations to our rising star, Danielle, a very worthy finalist.”

PM+M approaches 75 years serving royal tailor

PM+M is gearing up to mark 75 years served as the chartered accountant of choice for Savile Row tailor Benson & Clegg.

The high-end retailer of men’s clothing has two royal warrants to its name; the first issued by King George VI – the focus of Hollywood blockbuster The King’s Speech – in 1944 and the second by Prince Charles in 1992.

And it was in 1937 that the company appointed its current accountant, Harry Ryden, which later became part of Porter, Matthews and Marsden, now more commonly known as PM+M.

The two companies have built a close working relationship over the years. Benson & Clegg owner Ken Austin says he has received invaluable advice from PM+M over the years.

Ken explained: “PM+M is responsible for taking care of our accountancy, bookkeeping and they also handle all our IT – with the ability to log into our machines remotely and resolve issues from their offices in Blackburn.

“What makes the company really stand head and shoulders above the competition is the level of service provided. I get regular calls explaining recent developments in the financial world and how we should take advantage. PM+M bring with them ideas which I would never have dreamt of by myself.”

Ken added: “We’ve had many companies pitch for the contract over the decades, but there’s simply no reason to entertain them. PM+M’s service is invaluable to us and I can’t imagine that we’d be looked after this well by anybody else.”

Now, as Ken looks towards retirement, PM+M has helped implement a plan which will eventually see control of the business passed onto current directors Barry Austin and Tony Martin. Furthermore, Ken’s son-in-law, Mark Gordon, also joined the firm earlier in the year and is charged with planning how to develop the profile of the business.

PM+M partner Tony Tinker said: “Benson & Clegg is a fascinating company with a very prestigious history. We are very proud to have played a part in that. We really value our relationship.

“They were making for King George VI back when he was Duke of York, and more recent customers have included Charlie Watts of the Rolling Stones and Rod Stewart. They have an abundance of interesting stories to tell.”

PM+M Sponsored Car Update

Adam Morgan and the Ciceley Racing team completed their debut season in the Dunlop MSA British Touring Car Championship claiming an impressive seventh place overall to go with third position in the Independents Trophy.  In addition, Ciceley took home fourth place in the Independents Team Trophy.

Brands Hatch was the venue for what would be driver Morgan’s final race in Ciceleys Toyota Avensis which has served him so well over the season.  From next season onwards Ciceley will be campaigning a Mercedes-Benz.

Consistency has undoubtedly been the critical factor in Adam’s success this season and once again he didn’t disappoint as he secured three point-scoring finishes over the weekend.  This meant he continued his notable set of statistics in scoring 26 points out of 30 races in 22 of which he finished in a top 10 spot.

A rain soaked track meant conditions were tricky at Brands Hatch but undeterred Adam placed a season-best fifth in qualifying on Saturday.  After such an auspicious start Adam acknowledged that he probably played it too safe in the opening Sunday race which saw him finish in eighth position.  However, given that this weekend was all about consolidation he was probably wise to adopt a pragmatic approach.

And in Sundays second race he once again crossed the line in eighth place despite hitting some off-track gravel as he struggled with poor visibility.

The third and final race saw Adam gain a place to finish in seventh rounding out a remarkably consistent weekend and season as a whole.

Reflecting, Adam was understandably delighted with how events had unfolded.  “We set out this weekend to make sure we finished the year seventh overall and third-best Independent, and we’ve done it.  Today’s results weren’t the strongest of my season but they were nice and consistent and I’m chuffed to bits with what we’ve achieved.”

He was also quick to acknowledge the importance of the Ciceley team around him.  “It’s a great reward for the boys who have been with me all season and have worked so hard to get me to this position.  I can’t thank them enough.”

Business calls for tax incentives to boost private lending

The Government is being urged to cut taxes for private lenders and equity investors in a bid to increase the flow of credit to small firms.

The call came from the Forum of Private Business (FPB) and follows the Treasury’s latest plan to introduce a new ‘credit easing’ scheme to help small businesses gain access to finance.

Although the final details are yet to be published, the scheme is likely to involve creating bond markets from mixed SME debt packages.

However, the FPB is calling for further measures to allow alternative lenders to compete with mainstream banks, in addition to a plan to boost equity investment via tax breaks for venture capitalists.

“We need to focus not just on incentivising equity investors but on giving private lenders the tax breaks they need to be able to compete in the finance markets dominated by big banks,” said the Forum’s Chief Executive, Phil Orford.

“That would be a definite step towards creating the credit conditions small firms need now if they are to create jobs and drive economic growth.”

The lobby group has also outlined proposals to reform the existing Enterprise Investment Scheme (EIS) to private lenders paying the top rate of income tax.

Its recommendations include giving a 20% income tax relief on loans. It claims this would mean a loan of £100,000 would effectively cost a lender paying the top rate of tax £80,000.

It also proposes reducing to 20% the tax on interest received during the lifetime of a loan, as well providing an additional tax relief if a business fails before the loan is repaid.